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23 comments on Sydney Petrol Prices
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23 comments on Sydney Petrol Prices
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I don't ask why petrol is so expensive, I ask why it's so cheap. It's a fairly simple and well-established practice in business that when the raw materials price goes up, the finished product price goes up, too.
In 1998 crude oil was A$15/bbl and petrol A$0.75/lt, or A$0.35/lt absent taxes.
Now in 2008 crude oil is A$150/bbl and petrol A$$1.60/lt, or A$1.05/lt absent taxes.
The raw material has gone up by a factor of 10, but the processed product up only by a factor of 3 (again, absent taxes - with taxes, it's only up by 2; taxes are now a smaller portion of the total cost). By all rights petrol should be A$3.50/lt absent taxes, or about A$4.20/lt with them.
As to the taxes being reduced, or FuelWatch making some difference, 5 or 2 cents here or there is simply lost in the noise of the weekly petrol price retailing cycle, where the price varies by as much as 15c/lt.
I would increase the fuel tax, calling it a "carbon tax", and invest the money from that into renewables and public transport. Making driving harder, and give other options: stick and carrot.
Hi Kiashu,
I think the $A was only $US0.50 in 1998, versus $US0.97 now,so oil prices then would have been more like $A30 a barrel. Also petrol is imported from SE Asia a low prices due to diesel demand from China, but this is a much smaller factor than the X2 change in $A/$US exchange rates in last 10 years.
I think petrol tax will be increased if the Garnaut Report model is adopted, but even if not, petrol is still taxed more than any other carbon source is likely to be taxed.